Imperfect Synthetic Controls: Did the Massachusetts Health Care Reform Save Lives?

55 Pages Posted: 23 Jun 2018

Date Written: May 2018

Abstract

In 2006, Massachusetts enacted comprehensive health care reform which served as a model for the Affordable Care Act. I study the mortality effects of the reform using synthetic control estimation, relaxing two critical assumptions required to implement this method. The traditional approach assumes the existence of a perfect synthetic control, which cannot exist if the outcomes of the treated unit are outside of the "convex hull" or functions of transitory shocks. I propose simple modifications to relax these restrictions. The new estimator outperforms the traditional method in simulations. I estimate that the Massachusetts Health Care Reform reduced mortality by 3%.

Keywords: Health Care Reform, Synthetic Control Estimation, Xed Effects, Difference-in-Differences, Parallel Trends, Health Insurance, Mortality, Affordable Care Act

JEL Classification: I13, C23, I18

Suggested Citation

Powell, David, Imperfect Synthetic Controls: Did the Massachusetts Health Care Reform Save Lives? (May 2018). Available at SSRN: https://ssrn.com/abstract=3192710 or http://dx.doi.org/10.2139/ssrn.3192710

David Powell (Contact Author)

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

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